National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2018 (No. 1) (PB 45 of 2018)

Administered by Department of Health, Disability and Ageing

Legislation au F2018L00694 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 45 OF 2018

 

NATIONAL HEALTH ACT 1953

National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2018 (No. 1)

Purpose

 

The purpose of this legislative instrument, made under section 84AH of the National Health Act 1953 (the Act), is to amend the legislative instrument titled National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination (as amended) (PB 81 of 2017) to make changes to the pharmaceutical items that are determined to be exempt items.

 

Background

 

Part VII of the Act is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the Commonwealth provides reliable, timely and affordable access to a wide range of medicines for all Australians.

 

Drugs and medicinal preparations to which Part VII applies are declared as such by the Minister, by legislative instrument under subsection 85(2) of the Act. These are listed drugs (as defined in subsection 84(1)). The Minister may also determine by legislative instrument the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)) and the manner of administration of the form of the listed drug so determined (subsection 85(5)). If a drug has a declaration under subsection 85(2) in force in respect of it and determinations under subsections 85(3) and 85(5) in force in respect of it, then that declared drug in that determined form with that determined manner of administration is a pharmaceutical item. The Minister may also determine, by legislative instrument, brands of pharmaceutical items (subsection 85(6)).

 

Section 84AH empowers the Minister to determine, by legislative instrument, that a pharmaceutical item is an ‘exempt item’ if the pharmaceutical item satisfies the criteria in section 84AH. The criteria in section 84AH are as follows:

(a)   that there is only one listed brand of the relevant pharmaceutical item; and

(b)   there are no listed brands of other pharmaceutical items that are bioequivalent or biosimilar to the one listed brand of the relevant pharmaceutical item; and

(c)   there is at least one other pharmaceutical item that has the same listed drug as the relevant pharmaceutical item; and

(d)   the Minister is satisfied (having regard to advice, if any, from the Pharmaceutical Benefits Advisory Committee (PBAC)) that:

  1. the listed drug in the relevant pharmaceutical item represents suitable therapy for a particular patient population; and
  2. the relevant pharmaceutical item is suitable for use by a particular subgroup of that population because of either or both of the form and manner of administration; and
  3. no other pharmaceutical item that has that drug is suitable for use by that subgroup because of either or both of the form and manner of administration of the drug in that other item.

 

The effect of a pharmaceutical item being determined to be an exempt item is that the listed brand of that pharmaceutical item is excluded from statutory price reductions and price disclosure requirements under Division 3A and 3B of Part VII of the Act. The intention is to encourage the availability of certain pharmaceutical items with particular formulations of drugs that are used by a demographic subgroup (eg. children or geriatric patients) for whom other formulations of the drug are not suitable.

 

Changes to PB 81 of 2017 made by this instrument

 

This instrument makes the following changes to PB 81 of 2017:

 

One pharmaceutical item (listed drug = Hydrocortisone, form = Tablet 4 mg, manner of administration = oral) is no longer determined to be an exempt item because it no longer meets subsection 84AH(d)(iii). This is due to the listing of another pharmaceutical item and brand that would be suitable for use by the same patient population.

 

Variation and revocation

 

Unless there is an express power to revoke or vary PB 81 of 2017 cited in this Instrument and explanatory statement, subsection 33(3) of the Acts Interpretation Act 1901 is relied upon to revoke or vary PB 81 of 2017.

Consultation

The Amending Determination affects pharmaceutical companies with medicines listed on the PBS.  Before drugs are determined to be exempt, there are detailed consultations about the drug with the responsible person, and a recommendation is received from the Pharmaceutical Benefits Advisory Committee (PBAC).  Any PBAC recommendation is made following receipt of submissions by affected pharmaceutical companies.  For all pharmaceutical items that are determined to be exempt, affected pharmaceutical companies have previously sought exempt item status and the Pharmaceutical Benefits Advisory Committee (PBAC) has previously provided advice (where appropriate) to the Minister or the Minister’s Delegate under subsection 101(4AB) of the Act.  Further consultation on the Amending Determination was deemed unnecessary due to the consultation on determining exempt status with the affected pharmaceutical company had already taken place.

General

The instrument commences on 1 June 2018.

This instrument is a legislative instrument for the purposes of the Legislation Act 2003.

 

 


Overview

The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2018 (No. 1) was enacted to amend the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Determination, addressing the need to adjust the pharmaceutical items that are exempt from certain statutory price reductions and disclosure requirements under the National Health Act 1953. This legislative instrument was made under the authority of the Australian Parliament and aims to refine the criteria for determining which pharmaceutical items qualify for exemption, ensuring that only those items that are deemed suitable for particular patient populations are excluded from the specified statutory requirements. The policy objective is to maintain the availability of certain pharmaceutical items with specific formulations that are suitable for demographic subgroups, such as children or geriatric patients, for whom other formulations may not be suitable.

Scope and Application

The National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Amendment Determination 2018 (No. 1) amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Determination 2017 to adjust the list of pharmaceutical items considered exempt under the Pharmaceutical Benefits Scheme (PBS) of the National Health Act 1953. This Act applies to the Commonwealth, and specifically targets pharmaceutical companies with medicines listed on the PBS, modifying the criteria for certain pharmaceutical items to be exempt from statutory price reductions and price disclosure requirements. The changes are intended to reflect the current suitability of pharmaceutical items for specific patient populations, ensuring that the PBS continues to provide reliable, timely, and affordable access to medications. The amendments were made following consultations with affected pharmaceutical companies and recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC). This legislative instrument is effective from 1 June 2018 and operates as a legislative instrument under the Legislation Act 2003.

Key Provisions

The main operative sections of this legislative instrument (PB 45 of 2018) pertain to amendments to the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination (PB 81 of 2017). This determination, made under section 84AH of the National Health Act 1953, concerns the identification of pharmaceutical items that are exempt from statutory price reductions and price disclosure requirements under Division 3A and 3B of Part VII of the Act. The criteria for determining an item as exempt, as outlined in section 84AH, include specific conditions related to the uniqueness of the listed brand, the suitability of the drug for a particular patient population, and the form and manner of administration (sections 84AH(a)-(d)). This legislative instrument specifically addresses the exclusion of one pharmaceutical item from the exempt items list, as it no longer satisfies the criteria under section 84AH(d)(iii) due to the listing of another suitable pharmaceutical item for the same patient population. The obligations and requirements imposed by this legislation on the parties or entities it governs are primarily centred around the Pharmaceutical Benefits Scheme (PBS). Pharmaceutical companies with medicines listed on the PBS must ensure that their products comply with the criteria set out in section 84AH of the Act. Affected pharmaceutical companies must have previously sought exempt item status for their pharmaceutical items, and the Pharmaceutical Benefits Advisory Committee (PBAC) must have provided advice to the Minister or the Minister’s delegate under subsection 101(4AB) of the Act. The Minister is responsible for determining whether a pharmaceutical item meets the criteria for exemption, based on advice from the PBAC. Additionally, the Minister must consult with the relevant pharmaceutical companies and consider any submissions received from them before making a determination. The Act imposes several consequences for breaches of its provisions. While specific offences and penalties are not detailed in the explanatory statement, the Act generally provides for both civil and criminal penalties for breaches of its provisions. For example, section 111 of the Act provides for a penalty of up to 10,000 penalty units (currently equivalent to AUD 1,700,000) for a corporation found guilty of an offence against the Act. Further, section 112 of the Act provides for a penalty of up to five years imprisonment for an individual found guilty of an offence against the Act. These penalties reflect the seriousness with which the Commonwealth takes compliance with the provisions of the Act and the Pharmaceutical Benefits Scheme.

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